DALTON J.—Hoare & Co. v. Rajaratnam.
. 1932Present: Dalton and Drieberg JJ.
HOARE & CO. v. RAJARATNAM.
81—D. C. Colombo, 35,309.
Prescription—Acknowledgment of debt—Request for time not granted—Benefit
of condition—Plea in bar raised in appeal.
Where the acknowledgment of a debt is coupled with a request fortime, which was not granted,—
Held, that the creditor was not entitled to avail himself of thebenefit of the condition he had rejected, in bar of prescription.
A plaintiff cannot rely upon a ground of exemption from the law oflimitation raised for the first time in appeal.
PPEAL from a judgment of the District Judge of Colombo.
Nadarajah, for defendant-appellant.
N.E. Weerasooria, for plaintiff-respondents.
April 29; 1932. Dalton J.—
The respondent firm has obtained judgment in the lower Court againstthe defendant (appellant) for the sum of Rs. 1,357.85 in respect of goodssold and delivered and work and labour supplied. The defendant pleadsthat the amount is prescribed.
The last item in the account attached to the plaint is dated January-16, 1928. The plaint was filed on October 30, 1929. The plaint did hotset out, as it should have done under the provisions of section 44 of theCivil Procedure Code, the ground upon which the exemption from thebar of lapse of time was claimed, but, rat the opening of the case on theday of trial in the lower Court," counsel for plaintiff produced a letterof September 28, 1928 (marked P I), by defendant to the plaintiff firmapparently, as the judgment shows, for the purpose of setting it up as an
DALTON J.—Hoare & Co. v. Rajaratnam.
acknowledgment of defendant’s indebtedness, and as a bar to the pleaof prescription. Defendant does not deny that it is an acknowledgmentof his indebtedness. This document P 1 is in the following terms: —
Messrs. Hoare & Co.,Colombo.
Sivagirie Estate,Undugoda,28th Sept., 1928.
Dear Sirs,—In reply to your letter of 5th instant, on account of thefall of rubber prices, you will have to wait another – couple of months forsettlement.
In the meantime please send your contractor to put right the leakingroof, &c., as promised in your letter of 2nd November, 1927.
I am, Dear Sirs,
(Sgd.) R. N. Rajaratnam.
The trial Judge held this letter to be an unconditional promise to payon the expiration of two months from the. date of the letter, and thattherefore, plaint having' been filed on October 30, 1929, within twelvemonths of the expiration of those two months, plaintiff’s claim is notprescribed.
Plaintiff’s failure to comply with the peremptory provisions of section 44of the Code has been the chief cause of his difficulty in stating preciselythe ground upon which exemption from the bar of prescription is claimed.If that failure was intentional to give scope for future eventualities,one can have little sympathy with him. No objection was howevertaken on behalf of defendants to this failure on the part of plaintiff,although the bar must have been apparent on the face of the plaintwith its account of particulars attached. Possibly reference to thedocument P 1 by counsel for plaintiff at the opening of the case wasaccepted by both sides as making any amendment of the plaint un-necessary, for it has been held that the Judge may ex mero motu recognizethe bar and give effect to it. (Arunasalam v. Ramanathan'.)
Considerable correspondence passed between the parties, and it isquite clear, from the answer sent by the plaintiff firm to this letter P 1,that they did not interpret that letter as the trial Judge has done. * Thfeletter D 8 of October 2, it is agreed, is a reply to P 1, although on the faceof it it appears to be an answer to a letter of September 26. After dealing'with the; matter of the damaged roof the firm declines to grant anyfurther time and asks for a cheque in settlement by return. On firstreading the letter P 1, it appeared to me to be an acknowledgment ofdefendant’s indebtedness with a request for a time, a request, no doubtput in somewhat peremptory terms. Nothing I have heard during, theargument has removed that impression from my mind. It has, in fact,been strengthened by the other evidence, and it is clearly shown, byD 8 tljiat that is how the plaintiff firm read the letter. I am: unableto agree With the learned trial Judge that the letter was an'unconditional
> 9 S. C. C. 190.
DALTON J.—Hoare & Co. v. Rajaratnam.
promise to pay at the expiration of two months. It is an acknowledgmentof the defendant’s indebtedness at the date the letter was written, towhich has been added an intimation that he cannot raise the moneyfor two months, implying a request to the plaintiff firm to wait for thattime, which request was refused.
The law applicable here is very concisely set out in Buckmaster v.Russell1 quoting from Philips v. Philips3 “ The legal effect of an acknowl-edgment of a. debt barred by the statute of limitation is that of apromise to pay the old debt, and for this purpose the old debt .may besaid to be revived. It is revived as a consideration for a new promise.But the new promise and not the old debt is the measure of the creditor’sright. If a debtor simply acknowledges an old debt, the law impliesfrom that simple acknowledgment a promise to pay, for which promisethe old debt is a sufficient consideration. But if the debtor promisesto pay the old debt when he is able, or by instalments, or in two years,or out of a particular fund, the creditor can claim nothing more thanthe promise given him.
The fact that to the acknowledgment is added a request for time(to be distinguished, be it noted, from a promise to pay within a definitetime), does not, it seems to me, make the acknowledgment any less apromise to pay. Here the request for time was refused. The plaintifffirm is nevertheless seeking to obtain as against the defendant the benefitof those two months for itself in order to prevent the bar of prescriptionfrom running, when it refused the request of the defendant to allowhim the two 'months he asked for. There is no doubt that the firmcould have sued the defendant to recover the debt at once. To holddefendant bound by his offer or request to pay after the lapse of twomonths, when his request had been definitely rejected by the other side,would be unjust, and applying the authority cited, the simple question,therefore, is whether independently of the request to pay in two monthsthere is an absolute and unqualified acknowledgment of the existenceof the debt. I am of opinion that there is.
The action having been started more than twelve months after theacknowledgment P 1 was made, which acknowledgment does not takethe claim out of the Ordinance, the action is therefore prescribed. Whyaction was delayed for ten months after the final letter of December 28threatening immediate legal proceedings does not appear.
Further reliance was placed by plaintiff’s counsel during the courseof the argument before us upon the letter D 10 dated October 21, 1928.This is a letter written by defendant after plaintiff had refused his requestfor time, in which defendant says he is unwilling to pay “ unless and untilthe bungalow roof being mended properly”. It is argued that this isa conditional acknowledgment, upon which liability to pay arises whenplaintiff repaired the roof, and that defendant by his own acts andconduct took it out of the power of the plaintiff firm to do the repairs.All one need say on this point is that it was never suggested in the lowerCourt either in pleadings or issues or argument that the claim was takenout of the Ordinance by any acknowledgment other than that, contained
1 10 C. B. N. S. at p. 750.- 3 Hare at p. 290.
222DALTON J.—Hoare & Co. v. Rajaratnam.
in the letter P 1. I can find no local precedent on this point, but as ageneral, rule according to Indian practice, under the equivalent provisionof the Code of Civil Procedure, Schedule I., Order VII., r. 6, a plaintiff isnot to be allowed to rely upon a ground of exemption from the law oflimitation raised for the first time in the Appeal Court. In the absenceof any good reason being advanced why this practice should not befollowed in this case, I think under all the circumstances we shouldfollow it.-
The claim of the defence' that the debt is prescribed has been madeout, and the appeal must be allowed with costs. The decree enteredby the local Judge must be set aside, and the plaintiff’s action must bedismissed with costs.
This is an action for goods sold and delivered in which judgment wasentered against the appellant for Rs. 1,357.85. The only question iswhether the respondent’s claim is prescribed.
The last purchase was on January 16, 1928, no payment was madethereafter, and action was brought on October 30, 1929. The cause ofaction having arisen beyond the time allowed by law for instituting theaction, which is one year, the plaint should have stated the ground onwhich exemption was claimed—section 44 of the Civil Procedure Code—but this was not done. After the issues were framed, counsel for therespondents in dealing with* the issue of prescription produced theappellant’s letter P 1 of September 28, 1928, in which he said the appellantasked for two months’ time to pay. The respondents contended thatprescription began to run from the expiry of the two months. If thisis so, the action is not prescribed.
A letter by the appellant, D 10 of October 21, 1928, to the respondentswas produced by the appellant at the trial. Mr. Weerasooria sought touse this letter for the purpose of avoiding prescription. It is sufficientto say that he was not entitled to do. so, for the respondents must be heldto have relied on P 1 only. •
By P 1 of September 28, 1928, the appellant wrote to the respondents“ In reply to your letter of the 5th instant. On account of the fall of rubberprices, you will have to wait another couple of months for settlement.In the meantime please send your contractor to put right the leakingroof, &c., as promised in your letter of the 2nd November.” Therespondents’ letter of September 5 was merely a demand for payment.
The-respondents replied to this by their letter D 8 of October 2, 1928,which is as follows:—“We have for acknowledgment your letter datedthe 26th ultimo, and would refer you to our letter of the 3rd September,wherein we pointed out that the damage to the roof was caused by beingwalked on, and as such we were not prepared to undertake the workwithout a definite order from your good self.
“ The account outstanding is seriously overdue and we see no reasonablecause for your withholding same so long. We are closing our books forthe financial year and our Auditors insist on all long outstanding accounts
DRIEBERG J.—Hoare & Co. v. Rajaratnam.
to be paid at once, and we, therefore, request you to be good enough tofavour us with a cheque in settlement per return.” “ 26th ultimo ” isan error for 28th September.
If not for the letter P 1 the action should have been brought by January16, 1929; the plaint was filed on October 30, 1929, which was withina year of the expiry of the two months mentioned in P 1. The respond-ents having by D 8 refused to agree to the proposal of the appellant thathe would settle at the end of two months, the question for decision iswhether the respondents in these circumstances can rely on the promiseto pay for the purpose of taking the case out of the operation of theOrdinance under section 13.
Section 13 of Ordinance No. 22 of 1871, which follows the wording ofsection 1 of Lord Tenterden’s Act (9 Geo. IV., c. 14), enacts that “noacknowledgment by words only shall be deemed evidence of a new orcontinuing contract, whereby to take the case out of the operation ofthe enactments contained in the said section, or any of them, or to depriveany party of the benefit thereof, unless such acknowledgment shall bemade or contained in some writing to be signed by the party chargeableor by some agent duly authorized to enter into such contract onhis behalf ”.
The words “ acknowledgment or promise ” need some explanation,for it was suggested at the argument that the acknowledgment in P 1would suffice and could be availed of by the respondents, apart from thepromise. The original Statute of Limitations of James I. contained noprovision such as was made later by Lord Tenterden’s Act, but in manycases, of which I need only refer to Tanner v. Smart1 it was held that anew promise would take a case out of the statute for an action could bebased on the new promise provided it was unconditional, or when it wasconditional if the condition was fulfilled, and a simple acknowledgmentwas regarded as a fresh unconditional promise.
In Fettes v. Robertson 2, Bankes L. J. pointed out that the reason forintroducing the word “ acknowledgment ” into Lord Tenterden’s Actwas to cover the case of promises which the Courts imply from certainclasses of acknowledgments. He said “It is, I think, an assistance incases like the present never to lose sight of the fact that what a plaintiffhas to prove is a promise express or implied, to pay the debt, -madewithin six years before action, and that any consideration of an acknowl-edgment is merely for the purpose of seeing whether the acknowledg-ment is expressed in such language that an unqualified promise to paycan be implied from it
He quotes from the judgment of Baron Channel in Lee v. Wilmot*,“ I agree, that to take a case out of the statute, there must be a promise oracknowledgment in writing, and I doubt whether the Act meant twodifferent things when it said ‘promise or acknowledgment’”. If therebe a distinct acknowledgment it is not necessary that it should containa promise in explicit terms, but from the acknowledgment a promisemay be inferred, unless it be accompanied by a refusal to pay, or byany other circumstance which includes that inference.
i 16 B. and C. 603.2 37 T. L. R. 581.
. 3 L. R. 1 Ex. at p. 367.
224 jDRIEBERG J.—Hoare & Co. v. Rajaratnam.
There is here an express promise to pay on the expiry of two months,and the action has to be brought with. reference to this promise. InPhilips v. Philips,' which was approved in the case of Spencer v. Hem-merde * it was held that “ the legal effect of an acknowledgment of adebt barred by the Statute of Limitations is that of a promise to pay theold debt, and for this purpose the old debt is a consideration in law.In that sense, and for that purpose, the old debt may be said to be revived.It is revived as a consideration for a new promise. But the new promise,and not the old debt, is the measure of the creditor’s right.”
If there is a condition attached to the promise the condition-must befulfilled before the plaintiff can claim the benefit of the promise.
In this case the respondent’s claim that the condition has been fulfilledfor the reason that they brought this action within a year of the expiryof the two months requested in P 1, but can they by now saying thatthey observed the conditions gain the benefit of the promise which theyhad expressly rejected? The case of Buckmaster v. Russell * is a directauthority to the contrary; it was there held that a special promise isone which will not bind unless accepted by the plaintiff to whom it ispreferred, and that where a proposal is rejected it cannot be relied on asan acknqwledgment to bar the statute.
I agree with the order made by my brother Dalton.
1 3 Hare at p. 299.
(1861) 10 C.
2 H. of h.
B. new serie.t 745 and 4 L.
(1922) 2 A.552.